Provider Control in Oncology and Pharma's Billion-Dollar Opportunity

Oncology manufacturers spend more than $4 billion on supporting their sales forces and promoting their therapies to physicians, according to ZS analysis, but with the decision-making process moving away from individual physicians, are manufacturers wasting their efforts?

We’re seeing that about 50% of patients are treated at healthcare organizations that are already controlling the decision-making process or have a strong intent to do so. Put another way, about half of business is through organizations where decision-making and influence is exerted above the treating oncologists. Prescribing behavior in these high-controlling accounts shows a pattern of consistency and deviation from the norm that wouldn’t happen if physicians made decisions independently. This control can manifest itself in helping or hurting product performance. We’ve found that oncology companies that engage more effectively with high-controlling providers have an opportunity to increase revenue by 5 to 10%—a potential billion-dollar opportunity.

Several trends are creating the perfect storm, which is resulting in increased provider control and will continue to drive increased control in the future. Healthcare organizations continue to get bigger and more sophisticated: Over the last 10 years, more than 800 oncology practices were merged or acquired. These large providers have the sophistication and strength to control product use across the chain. Moreover, the high cost of cancer therapies and lack of clear clinical differentiation among products is increasing providers’ motivation to control decision-making in order to maximize outcomes, increase revenue or reduce costs, and maximize the patient experience.

To understand how this control drives product performance, and how manufacturers can realize the upside, they need to understand the provider’s underlying motivations. Healthcare organizations are driven by many factors, but we hypothesized and saw evidence for three primary motivations that lead to different prescribing patterns:

Financial motivation: Many organizations aim to control decision-making in order to improve profitability. For example, in CLL, we’ve seen that providers have driven greater use of the IV bendamustine vs. the oral option Imbruvica, potentially for stronger buy-and-bill benefits.

Clinical innovation: Organizations such as the Mayo Clinic and MD Anderson aim to control the decision-making process in order to achieve their goals of making innovative therapies accessible to patients and, ultimately, curing cancer. They typically drive greater use of the latest therapies, which feature novel science and the latest data. We’ve seen greater use of Keytruda in these accounts vs. Opdivo, and stronger adoption of Darzalex vs. Kyprolis in myeloma.

Experience-driven motivation: With an increasing emphasis on metrics like the Consumer Assessment of Healthcare Providers and Systems, organizations are focusing on ways to maximize the overall experience. We’ve noticed that providers that focus on the patient experience drive higher utilization of products that are easier for the patient to administer or have simpler reimbursement processes.

Once oncology manufacturers understand the motivations of these high-controlling providers, they need to tailor their offerings to the those motivations. For example, if your product is an oral oncology therapy competing with IVs, using real-world evidence to show how the overall cost of care is lower with an oral agent could incentivize a financially motivated account to partner with you.

The go-to-market model will also need to be tailored locally to take these different offerings to unique healthcare markets. Do oncology manufacturers with broad portfolios need multiple sales teams trying to drive product awareness in highly academic markets like Boston and Houston, where it takes six months to get a meeting on the calendar? Or would they be better off engaging these customers with more scientific resources and offerings that can address the provider’s preference for innovation and research?

It all starts with oncology companies systematically understanding which accounts are controlling and why they are controlling (that is, the motivation or intent behind the control and what impact it is having on their brand performance). With providers increasingly controlling what physicians prescribe, manufacturers that understand their motivations and bring new and relevant offerings stand to win.

Provider Control in Oncology and Pharma's Billion-Dollar Opportunity

Oncology manufacturers spend more than $4 billion on supporting their sales forces and promoting their therapies to physicians, according to ZS analysis, but with the decision-making process moving away from individual physicians, are manufacturers wasting their efforts?

We’re seeing that about 50% of patients are treated at healthcare organizations that are already controlling the decision-making process or have a strong intent to do so. Put another way, about half of business is through organizations where decision-making and influence is exerted above the treating oncologists. Prescribing behavior in these high-controlling accounts shows a pattern of consistency and deviation from the norm that wouldn’t happen if physicians made decisions independently. This control can manifest itself in helping or hurting product performance. We’ve found that oncology companies that engage more effectively with high-controlling providers have an opportunity to increase revenue by 5 to 10%—a potential billion-dollar opportunity.

Several trends are creating the perfect storm, which is resulting in increased provider control and will continue to drive increased control in the future. Healthcare organizations continue to get bigger and more sophisticated: Over the last 10 years, more than 800 oncology practices were merged or acquired. These large providers have the sophistication and strength to control product use across the chain. Moreover, the high cost of cancer therapies and lack of clear clinical differentiation among products is increasing providers’ motivation to control decision-making in order to maximize outcomes, increase revenue or reduce costs, and maximize the patient experience.

To understand how this control drives product performance, and how manufacturers can realize the upside, they need to understand the provider’s underlying motivations. Healthcare organizations are driven by many factors, but we hypothesized and saw evidence for three primary motivations that lead to different prescribing patterns:

Financial motivation: Many organizations aim to control decision-making in order to improve profitability. For example, in CLL, we’ve seen that providers have driven greater use of the IV bendamustine vs. the oral option Imbruvica, potentially for stronger buy-and-bill benefits.

Clinical innovation: Organizations such as the Mayo Clinic and MD Anderson aim to control the decision-making process in order to achieve their goals of making innovative therapies accessible to patients and, ultimately, curing cancer. They typically drive greater use of the latest therapies, which feature novel science and the latest data. We’ve seen greater use of Keytruda in these accounts vs. Opdivo, and stronger adoption of Darzalex vs. Kyprolis in myeloma.

Experience-driven motivation: With an increasing emphasis on metrics like the Consumer Assessment of Healthcare Providers and Systems, organizations are focusing on ways to maximize the overall experience. We’ve noticed that providers that focus on the patient experience drive higher utilization of products that are easier for the patient to administer or have simpler reimbursement processes.

Once oncology manufacturers understand the motivations of these high-controlling providers, they need to tailor their offerings to the those motivations. For example, if your product is an oral oncology therapy competing with IVs, using real-world evidence to show how the overall cost of care is lower with an oral agent could incentivize a financially motivated account to partner with you.

The go-to-market model will also need to be tailored locally to take these different offerings to unique healthcare markets. Do oncology manufacturers with broad portfolios need multiple sales teams trying to drive product awareness in highly academic markets like Boston and Houston, where it takes six months to get a meeting on the calendar? Or would they be better off engaging these customers with more scientific resources and offerings that can address the provider’s preference for innovation and research?

It all starts with oncology companies systematically understanding which accounts are controlling and why they are controlling (that is, the motivation or intent behind the control and what impact it is having on their brand performance). With providers increasingly controlling what physicians prescribe, manufacturers that understand their motivations and bring new and relevant offerings stand to win.